For Professional Investors Only. For Information Purposes Only. Not Investment Advice.
We suspect that stock market index performance worldwide will not be paticularly remarkable for at least the next 12 months and possibly longer, so whilst there may be merit in picking off some value names for the long run, equivalently, there are plenty of value traps where stocks are cheap for the right reasons and are likely to stay cheap for some time to come. Whilst there may still be a seasonal rally of some sorts between now and year-end, I don't feel sufficiently confident to return to miners, banks and other such high beta sectors. Instead, for the time being, we are concentrating on yielding investments in secure sectors where the dividends are covered and the growth trajectory is fairly visible, with market neutrality in most cases. As the downside risk to stock indices and global economic growth is so palpable, there may be merit in evaluating if some portfolio protection via options, futures or volatilty instruments has a place in your portfolio - subject your own risk profiles and tolerances. Our duration on the bond side is well under 3 years by which time we anticipate that the interest rate environment will have normalised. We are also looking to take tactical positions on Natural Gas, Wheat, the Dollar Index and EUR/GBP.
We suspect that stock market index performance worldwide will not be paticularly remarkable for at least the next 12 months and possibly longer, so whilst there may be merit in picking off some value names for the long run, equivalently, there are plenty of value traps where stocks are cheap for the right reasons and are likely to stay cheap for some time to come. Whilst there may still be a seasonal rally of some sorts between now and year-end, I don't feel sufficiently confident to return to miners, banks and other such high beta sectors. Instead, for the time being, we are concentrating on yielding investments in secure sectors where the dividends are covered and the growth trajectory is fairly visible, with market neutrality in most cases. As the downside risk to stock indices and global economic growth is so palpable, there may be merit in evaluating if some portfolio protection via options, futures or volatilty instruments has a place in your portfolio - subject your own risk profiles and tolerances. Our duration on the bond side is well under 3 years by which time we anticipate that the interest rate environment will have normalised. We are also looking to take tactical positions on Natural Gas, Wheat, the Dollar Index and EUR/GBP.
